12-Jan-11: How the jihadists have cemented power and gotten rich, with unwitting donors footing the bill

Gaza City downtown

Journalists Ehud Yaari and Eyal Ofer published an analysis this week on the website of the Washington Institute for Near East Policy. Entitled "Gaza's Economy: How Hamas Stays in Power", it illustrates just how ineffective the measures to curb the Hamas terror organization have been.

Selected highlights:

• Hamas, when it won the 2006 Gaza elections, was in deep financial trouble. It longer is. The Hamas of 2011 is "a well-funded conglomerate".
• Hamas is reaping the benefits of having mastered the art of exploiting the strong cashflow of aid money sent by foreign donors the Palestinian Authority and intended to benefit the general Gazan Arab population. This has worked spectacularly well. Much, maybe most, of the money intended to address the hardship of Gaza's poor has, the authors say, gone to waste.
• The cash resources available to Hamas grew from $40 million five years ago to $540 million. 
• Inparallel, Hamas has dumped the burden of responsibility for Gaza's 1.6 million residents onto others. Money, as bankers like to say, is fungible. The parties who think they are contributing aid to poor Gazan Arabs are in fact enriching Hamas and funding its acts.
• Hamas recently began acquiring businesses and initiating new ventures: the Islamic Bank, the al-Multazim insurance firm, housing projects, hotels, a shopping mall, resorts, agricultural farms, a fish hatchery. Hamas is becoming the largest player in Gaza's private sector.
• How does this river of cash reach Hamas? The authors say it's through the banks, and not via the tunnels. $2 billion per year is transferred into Hamas hands via the Palestinian banking system. 
• $1.2 billion is paid each year into Gaza banks as pensions and salaries for 77,000 Hamas regime employees "kept on the payroll even though they are not working..." This seems to bother no one.
• Israeli military intelligence says payments ("subsidies") from the mullahs of Iran to Hamas run at $100 million annually, channeled mainly into weapons purchases. The PA's 'moderate' president Mahmoud Abbas says, for what it's worth, that Iranian aid is $250-500 million, but he is not believed.
• In 2005, Hamas had 4,000-7,000 military personnel, a small charity and education network and a skeletal party bureaucracy. Today, having gained full control over all government ministries and municipal councils in Gaza, over many civilian agencies, over every security and intelligence service in the territory including the 10,000-strong "blue" police and over many other jobs and patronage-channels, Hamas presides over a $300 million per year payroll. 
• Hamas plays hardball. It squeezes businesses out to eliminate competition. It coerces owners into selling building materials and other goods below market prices or as 'donations' to Hamas. It uses incoming aid and PA money to put its supporters on the Hamas payroll, replacing Fatah loyalists in government jobs and cementing its own power in the process. 
• Lists used by donor agencies to (as they claim) screen for terrorists somehow manage to include very few Hamas operatives (terrorists). Even if this were fixed, screening is done by Hamas' own sympathizers. The unsurprising result: thousands of Hamas members, including many military personnel with fake civilian positions, have their salaries funded by outside donors.
• Hamas itself refuses to reveal its budget or its sources of income. The numbers it publishes are considered nonsense by analysts. 
• Nothing currently in place prevents Hamas from continually exploiting this absurd situation.

For their analysis of how the terrorists are strengthening their position daily, click to read more.